On Aug. 22, Charming Shoppes
- With net sales inching up only 1%, Charming Shoppes seems to be losing appeal as its core customers tighten their belts in discretionary spending.
- Like most other retailers these days, Charming Shoppes was forced to clear out excessive summer inventory by using aggressive markdown strategies. This hurt margins and ultimately led to a significant drop in earnings.
- Despite tough economic conditions, management is optimistic about some of its new initiatives -- such as the launch of the revolutionary "right-fit" pant -- to help revitalize the company's financials.
- While Charming Shoppes management is confident in the company, the Motley Fool CAPS community doesn't seem so sure of its future; the stock receives only two stars out of five. Meanwhile, competitor Dress Barn
(NASDAQ:DBRN) earns a full five-star rating. Target(NYSE:TGT) isn't far behind, grabbing four stars.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
Q2 2008 |
Q2 2007 |
Change |
|
|---|---|---|---|
|
Sales |
$770.9 |
$763.4 |
1.0% |
|
Net Profit |
$18.3 |
$32.6 |
(43.9%) |
|
EPS |
$0.14 |
$0.24 |
(41.7%) |
|
Diluted Shares |
130.2 |
139.4 |
(6.5%) |
Get back to basics with the income statement.
Margin Checkup
|
Q2 2008 |
Q2 2007 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
28.5% |
30.0% |
(1.5) |
|
Operating Margin |
3.7% |
6.8% |
(3.2) |
|
Net Margin |
2.4% |
4.3% |
(1.9) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q2 2008 |
Q2 2007 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$259.9 |
$234.0 |
11.1% |
|
Accounts Rec. |
$3.1 |
$3.1 |
(1.1%) |
|
Inventory |
$405.6 |
$381.5 |
6.3% |
|
Liabilities |
Q2 2008 |
Q2 2007 |
Change |
|---|---|---|---|
|
Accounts Payable |
$165.3 |
$173.7 |
(4.8%) |
|
Long-Term Debt |
$306.2 |
$186.5 |
64.2% |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
YTD 2008 |
YTD 2007 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$163.5 |
$175.6 |
(6.9%) |
|
Capital Expenditures |
$74.0 |
$55.0 |
34.6% |
|
Free Cash Flow |
$89.5 |
$120.7 |
(25.8%) |
Free cash flow is a Fool's best friend.
Related Foolishness:
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